Downsizing Blog

People criticize business subsidies because they harm taxpayers. But there is another group harmed by business subsidies: the recipients. Government welfare for low-income families induces unproductive behaviors, but the same is true for companies taking corporate welfare.

For more than a century, America has been the global leader of the aviation industry. But these days, the government-run parts of the industry are inefficient and falling behind, including airports, security screening, and air traffic control (ATC).

Neal McCluskey has updated an overview study on federal aid for K-12 education, which is posted at DownsizingGovernment.org. Neal reports that K-12 spending under the U.S. Department of Education and its predecessor agencies rose from $4.5 billion in 1965 to $40.2 billion in 2016, in constant 2016 dollars.

I met with a group of House Republicans last week to talk about tax reform. Ways and Means chairman Kevin Brady is laying the groundwork for a major tax restructuring next year, and so GOP members are boning up on reform ideas.

In today’s Wall Street Journal, Scott McCartney reports on the superior air traffic control (ATC) system north of the border. American aviation is suffering from a bureaucratic government-run ATC, while Canada’s privatized system is moving ahead with new technologies that reduce delays and congestion.

The federal government funds hundreds of subsidy programs for state, local, and private activities, such as programs for housing and economic development. State and local governments, businesses, charities, and individuals could fund such local activities by themselves without federal aid. But America is increasingly kicking local activities up to the federal government, and so Uncle Sam the Middleman keeps growing.

Bloomberg reports that the Port of Los Angeles is increasing automation with the installation of self-driving cranes and other equipment. The automation is being partly driven by the need to minimize the use of high cost and troublesome unionized labor.

The problem with the federal government is not just its vast size, but its increasing scope. It has expanded into many areas that should be left to state and local governments, businesses, charities, and individuals. The federal expansion is sucking the life out of the private sector and creating a top-down bureaucratic society.

A Time article by James Grant warning about rising federal debt has prompted pushback by columnists questioning whether debt is really so bad. At the Washington Post, Wonkblog columnist Matt O’Brien says “there’s no reason to cut the debt today.”